(a)Limitations. A recipient may withdraw funds from its letter of credit for immediate deposit into an escrow account for use in funding loans and grants for the rehabilitation of privately owned residential property under § 570.202(a)(1). The following additional limitations apply to the use of escrow accounts for residential rehabilitation loans and grants closed after September 7, 1990:

(1) The use of escrow accounts under this section is limited to loans and grants for the rehabilitation of primarily residential properties containing no more than four dwelling units (and accessory neighborhood-scale non-residential space within the same structure, if any, e.g., a store front below a dwelling unit).

(2) An escrow account shall not be used unless the contract between the property owner and the contractor selected to do the rehabilitation work specifically provides that payment to the contractor shall be made through an escrow account maintained by the recipient, by a subrecipient as defined in § 570.500(c), by a public agency designated under § 570.501(a), or by an agent under a procurement contact governed by the requirements of 24 CFR 85.36. No deposit to the escrow account shall be made until after the contract has been executed between the property owner and the rehabilitation contractor.

(3) All funds withdrawn under this section shall be deposited into one interest earning account with a financial institution. Separate bank accounts shall not be established for individual loans and grants.

(4) The amount of funds deposited into an escrow account shall be limited to the amount expected to be disbursed within 10 working days from the date of deposit. If the escrow account, for whatever reason, at any time contains funds exceeding 10 days cash needs, the grantee immediately shall transfer the excess funds to its program account. In the program account, the excess funds shall be treated as funds erroneously drawn in accordance with the requirements of U.S. Treasury Financial Manual, paragraph 6-2075.30.

(5) Funds deposited into an escrow account shall be used only to pay the actual costs of rehabilitation incurred by the owner under the contract with a private contractor. Other eligible costs related to the rehabilitation loan or grant, e.g., the recipient's administrative costs under § 570.206 or rehabilitation services costs under § 570.202(b)(9), are not permissible uses of escrowed funds. Such other eligible rehabilitation costs shall be paid under normal CDBG payment procedures (e.g., from withdrawals of grant funds under the recipient's letter of credit with the Treasury).

(b)Interest. Interest earned on escrow accounts established in accordance with this section, less any service charges for the account, shall be remitted to HUD at least quarterly but not more frequently than monthly. Interest earned on escrow accounts is not required to be remitted to HUD to the extent the interest is attributable to the investment of program income.

(c)Remedies for noncompliance. If HUD determines that a recipient has failed to use an escrow account in accordance with this section, HUD may, in addition to imposing any other sanctions provided for under this part, require the recipient to discontinue the use of escrow accounts, in whole or in part.

[55 FR 32369, Aug. 8, 1990]

Title 24 published on 2014-04-01

no entries appear in the Federal Register after this date.

This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, Office of the Assistant Secretary for Community Planning and Development, HUD

Notice.

Comment Due Date: March 9, 2015.

24 CFR Part 570

Summary

This notice announces and solicits public comment on the fee that HUD proposes to collect from borrowers of loans guaranteed under the HUD's Section 108 Loan Guarantee Program (Section 108 Program) for the purpose of covering the credit subsidy costs of operating the program. Elsewhere in today's Federal Register, HUD is publishing a proposed rule that would amend its regulations for the Section 108 Program to permit HUD to collect a fee for the Section 108 Program.

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, Office of the Assistant Secretary for Community Planning and Development, HUD

Proposed rule.

Comment Due Date: March 9, 2015.

24 CFR Part 570

Summary

This proposed rule would amend HUD's Section 108 Loan Guarantee Program (Section 108 Program) regulations to permit HUD, in accordance with statutory authority, to collect fees from Section 108 borrowers to offset the costs of Section 108 loan guarantees. HUD is proposing this rule to ensure that it can begin to make Section 108 loan guarantee commitments without appropriated subsidy. The Department of Housing and Urban Development Appropriations Act, 2014, authorizes HUD to collect fees from borrowers for this program. In anticipation of further appropriations acts authorizing the collection of fees for Section 108 loan guarantees, HUD proposes to add a new section to its current regulations to reflect that when appropriations for credit subsidy costs as authorized by Congress are either not available or insufficient and HUD has statutory authority to collect fees, HUD will impose a fee on Section 108 Program borrowers and explain the basis for the fee imposed. The proposed new regulatory section would provide for HUD to set the fee by notice. Elsewhere in today's Federal Register, HUD is publishing the notice that would propose the fee to be established for the fiscal year 2015, subject to statutory authorization.